Starting A Family With Debt? 5 Reasons To File Bankruptcy Now
Are you planning to start a family? Even if you've already begun the process through adoption or pregnancy, now may be the best time to get rid of your debt struggles through bankruptcy. Here are a few reasons not to put off this task.
1. You Can Focus Now
Preparing for a new family member is exciting, but it's still a period in which you have more free time and attention to spend on other important tasks. Bankruptcy filing can often be fairly complicated and require documentation gathering, meeting with your lawyer, working with the trustee, and completing deadlines. If you do these steps now, you'll have an easier time getting ready for this major change.
2. It Can Be Done In Time
Chapter 7, or liquidation, bankruptcy can be started and finished in as little as a few months. So if you have a few months or more until the little one arrives, you may be able to be through with bankruptcy and ready to move on. And if your bankruptcy does take longer, the majority of legwork will be done at the beginning so you'll feel like you've already put it in the past.
3. You'll Have New Expenses
Having a child is an expensive proposition, usually from day one. So if you're already struggling under a debt burden from the past, you may need the extra budget space. Free up as much as possible now through discharge or a years-long Chapter 13 repayment plan.
4. It Reduces Stress
Just taking the first step of bankruptcy can give you a sense of control over your debts. You gain freedom from repossession or foreclosure, harassment from creditors, and overwork trying to make payments. All this means your family's stress and anxiety are reduced at a time when you need to be the most calm and healthy — both physically and mentally.
5. Waiting May Endanger Benefits
Adding children to your family often means new tax credits. Whether it's the one-time adoption credit or ongoing child and child care tax credits, you may see much larger and more beneficial tax refunds in the immediate future. But if any of your debts involve old taxes, student loans, arrears for support, or even agency fees, your refunds will be at risk of seizure, and the family will miss out.
While your first instinct as a new parent-to-be may be to wait until things settle down before filing bankruptcy, now could be an even better time to do so. The best way to make this decision is to meet with a qualified bankruptcy attorney in your state today. Contact a bankruptcy attorney for more information.